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Case Study of Intranet COST–BENEFIT Assessment
1Amer Daeri and 2Rajab Absaim
1&2Computer Engineering Department , Zawia University , Libya
mail ibnjubair1@yahoo.co.uk
Abstract. In the mid nineties, the intranet started as a means of using web technology on the local networks
i.e. benefiting from the features of the internet on the local scale. The intranet provided many benefits for the
many organizations that implemented this technology such as information publishing, document
management, training, etc. One of the basic reasons of using intranet is saving the various costs associated
with many activities that incurred high costs such as information printing, distribution and storage.
Initially installing intranet technology, as the case with anything else, needs cost and in many cases, this cost
can be high especially if there is no network in place.
This paper examines all the possible costs associated with implementing intranet technology based on the
assumption that there is no network in place. Hence, all associated costs will be considered such as hardware,
software, network etc.
Then the paper looks at cost – benefit assessment as a result of utilizing intranet technology, which takes into
account all possible costs incurred and benefits gained. A full calculation is done taking Tripoli university as
a study case based on a number of assumptions , where the return on investment is calculated as result of the
cost – benefit assessment to see if implementing intranet technology is worthwhile or not.
`. Intranet, Networks, Cost, Benefit, Return On Investment, Savings, Productivity
1. Introduction
In the last few years many organizations adopted what became to be known as the electronic management. One
of the tools for this management system is the intranet. Intranet has provided the means by which conventional
management tools such as information publishing document management to be implemented in an electronic
form. This is has been going on since mid nineties of the last centaury in the U.S. and Europe. In our country,
this process just started in a slow base. One of the main reasons for that is top management in most of our
organizations lend the slowness of adopting such technology to lack of finance and unavailability of enough
budgets to implement such projects. Implementing intranet technology requires a powerful infrastructure and in
turn this will require relatively high investment. So cost is a major factor for many of our organizations and of
course is not the only factor.
In our opinion, top management is more concerned about the return on investment in such projects. Hence, this
paper will explain in figures the benefits gained against the cost paid for such projects taking Tripoli University
as a study case through full calculation of all costs incurred and benefits gained if such project is implemented at
the University taking the members of staff as a sample population.
2. Definition
Intranet can be defined in many ways but may be the simplest definition is that an Intranet is a private
computer network that uses Internet standards and protocols within an organization. Members of such
organization can communicate and collaborate more efficiently with one another, to achieve better results than
the conventional means of data access and transfer thereby increasing productivity, [1, 2]
3. Intranet Cost
When considering Intranet costs, there are many factors involved, starting from design stage all the way to the
operating stage. Because some of the benefits Intranet brings about are not tangible, it is rather difficult to
quantify such benefits, although some of these benefits cost money. A list of possible Intranet costs can be
categorized as follows:
•
Hardware Cost: This covers the cost of the equipment that makes up the network, which include:
1. Client workstations with sufficient processing power to use Intranet applications and an operating system
that can run TCP/IP.
13th International conference on Sciences and Techniques
of Automatic control & computer engineering
December 17-19, 2012, Monastir, Tunisia
STA'2012-TCE-2955, pages 1503-1516
Academic Publication Center of Tunis, Tunisia
2
2. Development server: This is a stand-alone server used to test new software applications and to develop web
applications and sites.
3. Staging server to use as a pre release site for testing.
4. Production web server to run the web site. Size of the server depends on the size of the site.
5. Other network devices such as switches, routers, cables etc [1, 2, 3].
• Software Costs: These cover the costs of the browser, server, applications and development software.
Server costs: These costs cover the platform support costs such as Windows NT or UNIX, the running of the
HTTP server and other server software components.
Browser costs: Most of known browsers are free of charge such as Microsoft Internet explorer or Netscape
navigator. The web browser and other applications such as e-mail reside on top of a standard network interface
called Winsock (windows socket), the layer that enables window's applications to plug into the underlying
stack and talk TCP/IP. TCP/IP assemble messages into addressed envelop called packets, and then these
packets are passed to a piece of software called a network driver, which controls a piece of hardware called a
network adapter. These layers are programs that manufactured by different vendors and they contribute to the
browser cost. Other costs are keeping the Winsock stack running and up-to-date [1, 2, 3].
•
Support Costs: These are costs related to user training and help desk. Users should receive basic instruction in
browser capabilities and web navigation. Cost of user training in web applications is generally low, because
web pages follow simple look-and-feel standards. Help desk provides 24-hour support to serve geographically
dispersed users [1, 2, 3].
• Network Costs: These include the cost of network infrastructure such as wiring, which usually very high,
switches, network adapters, etc. However, adding Intranet features will add extra cost.
The extra cost relating to adding a TCP/IP component to the network infrastructure comes from mapping the
SMTP to existing e-mail systems as well as adding firewall for connecting to the Internet. On top of that, the
costs connected with learning these new features because Intranet can handle multimedia, it consumes large
chunks of bandwidth, which means an added cost, although, justified through the benefits it provides [1, 2, 3].
• Costs of Creating and Updating Content: Putting content on an Intranet, whether new or recycled from
legacy documents results in the following types of costs:
• Conversion Cost: This cost is associated with converting documents and graphic material to web enabled
format such as HTML, PDF and GIF or JPEG respectively. This cost includes tools, labor and standards that
needed to carry out the conversion [2].
•
Coordination Cost: Coordination costs are associated with creating and enforcing procedures to ensure that
local content providers coordinate globally in order to reinforce rather than conflict with each other. Such
procedures might include issuing web pages templates that adhere to corporate identity practices [2, 3].
• Indexing Cost: Due to the ongoing growth of content on an Intranet, it requires to be re-indexed more
frequently to simplify information search and this re-indexing requires significant processing time to generate
[2, 3].
The above-mentioned costs depend on the types of content being created. If more graphically oriented content is
considered, the cost will rise sharply. So for heavy graphical content other cheaper methods should be sought
such as CAD applications, which can be configured as a helper application in a web browser [1, 2, 3].
• Cost of Applications Development: Whether applications are developed locally or acquired from external
sources, they raise some cost, although Intranet based applications are simple to develop and do not require
great deal of tools. But there are some hidden costs such as :
1. Lack of Development Standards: Because development of Intranet applications are rather new, procedures
that involve modeling design, testing and documentation are not fully established Applications are glued
together out of freeware library components and new code. Therefore when problems arise, finding and
implementing the solution can be time consuming and very expensive.
2. Unsupported Languages: Another potential cost source is the language used to develop applications. Some
of these languages, although are simple to use, have no support infrastructure like mainstream languages
such as C++ compiler.
3
3. Bugs: The cost of training users in web applications is low in comparison with other software. The cost of
responding to bug reports and demands for enhancement might proof to be expensive due to lack of support
infrastructure [1, 2, 3].
• Security Costs: These include securing information on the web server through the network and finally at the
workstation. On the web server information is protected from physical theft, corruption or erasure, disk failure
and unauthorized access. Putting the information on the network needs to be protected by using public key
technology encryption, which provides encryption, authentication and digital signature services.
At client, cost of security is connected with a good training program for users, because at this level user
ignorance is the main source of risk [1, 2, 3].
4. Intranet Cost-Benefits Assessment
There are many reasons that make Intranet cost-benefits analysis is necessary:
• Because even relatively intangible costs and benefits can be measured if it is approximated
• Because the benefits of an Intranet may be obvious to IT manager, but not necessarily to senior managers,
upon whom commitment the Intranet will survive or perish, nor to the majority of potential end users who feel
they are already overburdened with information and systems to manage.
• Because the up-front direct costs of an Intranet may be relatively low, but the human costs of setting it up,
populating it with content and then maintaining that content are considerable.
• Because even word processing and fax had to be justified when they were first introduced.
• Perhaps the strongest argument for conducting a proper assessment of the costs and benefits of an Intranet is to
provide the ammunition needed to do the job properly, with an appropriate budget and a realistic timetable [4].
4.1 Calculating Cost-Benefits
Here is a method for calculating the Intranet cost-benefits:
• Determining what the Intranet can do in its initial implementation.
• Analyzing what it will cost to make this happen both up-front and in ongoing maintenance.
• Anticipating the cost savings and the productivity benefits that will arise.
• Calculating the return on investment and how long this will take to materialize [4].
4.2 Intranet scope
It is not possible to conduct a meaningful analysis without a clear indication of what the Intranet should
achieve. There are many ways of categorizing what an Intranet does. Here are some of the common uses of
an Intranet:
•
Information publishing: using the Intranet to deliver news and other information in the form of directories
and web documents.
• E-mail: implementing an e-mail system that integrates seamlessly with the Intranet, allowing information to
be both 'pushed' and 'pulled'.
• Document management: using the Intranet to allow users to view, print and work collaboratively on office
documents (word-processed documents, spreadsheets, presentations, etc.).
• Training: using the Intranet to deliver training at the desktop.
• Workflow: using the Intranet to automate administrative processes.
• Databases and other systems: using the Intranet as a front-end to organization-specific systems, such as
corporate databases.
• Discussion: using the Intranet as a means for users to discuss and debate issues.
Pretty well every organization will implement the first of the above mentioned list that is information publishing.
The majority will have ambitions to extend their Intranet to cover the rest of the list at some stage [4].
4.3 Establishing Some Basic Facts and Figures
To make the calculations later, some basic facts and figures about the Intranet audience will need to be
gathered:
•
The size of the Intranet target population and, if appropriate the proportion this represents of an
organization’s total projected Intranet user population.
•
The number of people within the target population who will need new PCs, the number who are currently
not networked and the number who will be provided with access to the Internet.
4
•
The average annual salary and benefits of the target population, the average working hours in a day and
working days in a year (used to calculate labour savings and productivity gains) [4].
4.4 Analyzing Costs
The next step is to analyze the costs that will be incurred in setting up and running the Intranet. There are
two main categories of cost:
• Capital Costs
These are the Hardware and software costs, which will be met by the organization’s capital budget and
normally written off over a number of years.
• Expense Costs
Other costs that is likely to be borne by the organization's normal expense budget.
It is also necessary to make a distinction between the one-off costs associated with start-up and ongoing
maintenance costs. Here are some ideas for what to include in each case:
•
Start-up Capital Costs
These costs form a major part of the up-front investment. Because, as fixed assets, they have a useful life of
several years and a resale value, they are normally written off over three or four years. These costs include:
1. New PCs for providing Intranet access to employees without their own
PCs
2. Providing network connections to PCs not currently networked.
3. Web servers and server software
The cost of software applications is also has to be provided, whether they are developed (in-house or
outside) or purchased off-the-shelf. What is needed will depend on what the Intranet will be used for [4].
• Start-up operating costs
These also form part of the up-front investment, but are more likely to be written off in the first year of
implementation:
1. Design consultancy: the cost, whether internal or external, of creating a
structural, navigational and graphical design for the part of the Intranet
being analyzed.
2. Promotion: the cost, again internal or external, of launching the Intranet
to the target population.
3. Training: the total cost, per user, of providing training in both how to use
the Intranet and how to provide content [4].
•
Ongoing Capital Costs
Some money will have to be reserved each year, from year 2, for upgrades to the server hardware and
software and to the off-the-shelf applications. Perhaps the best way of estimating this will be as a percentage
of the initial cost – say 25% [4].
• Ongoing Operating Costs
A considerable amount of effort is required to maintain and continuously improve the Intranet. These costs
need to be budgeted from year one:
4.5 Editorial and design personnel: the people required to administer Intranet policies and act as overall
content editors for the target population. This will include salaries, benefits and expenses.
4.5 Technical personnel: the people required by the organization as a whole to keep the Intranet up and
running from a technical perspective.
4.5 Internet access: the cost of providing lines out to the Internet. A simple way of estimating this is to make
a small annual allowance, say 50 L.D per year, for each employee who will have access [4].
4.5 Forecasting Benefits
Not many people have trouble calculating costs. It takes a little more ingenuity to pin down the benefits.
There are three main categories of benefit:
5
•
Direct Cost Savings
Savings in expenditure other than labour, print paper, telephone, travel costs, etc. - that can be directly
attributed to the introduction of the Intranet. These can usually be calculated in three steps:
1. The number of incidences of expenditure in the time period
2. The cost of each incidence.
3. The proportion of these incidences that could be eliminated using the Intranet.
For example, if the number of pages of formal printed material received per person per year was 500, the cost
in dirham per page including printing and delivery, was 60 dirham and the percentage of these pages that
could be delivered on-line was 70%. [3, 4].
The saving in dinars = 500 x (60 / 1000) x 70% x No. of users 1
•
Labour Savings
Savings in the amount of time required to carryout tasks as a result of introducing the Intranet. These can be
expressed in minutes per person per day. To calculate the saving, divide the number of minutes saved by
the number of minutes in the day (60 x the number of working hours) and multiply by the size of the
population and the average annual salary. [4,5]
The Labour savings = Number of minutes/(60 x working hours per day) x Number of users x
average annual salary 2
• Productivity Increases
Increases in output per person attributable to the introduction of the Intranet expressed as a percentage.
Because personal productivity has such a wide range of implications from job to job and organization to
organization, it is probably easier to convert these to simple labour savings. For example, if the total
productivity gains were 3%, calculate the savings as (3 / 103) x the size of the population x the average
annual salary. The actual effect of higher productivity, such as increases in sales, could well be much larger
and, if this can be estimated, then it should be done. [3,4]
Savings = Productivity gain as percentage x Number of users x average annual salary 3
4.6 Analyzing the Results
Before any conclusions can be made from the findings, it is necessary to total up the costs and benefits [4].
•
Summarizing Costs
If the target population is a subset of the organization's total Intranet population, then it will only need to take
a proportion of the costs that are borne centrally. The following costs are likely to be central:
1. Server hardware and software
2. The purchase, development, maintenance and upgrades to software applications
3. Provision of technical personnel
It will only be needed to take account of the cost of applications that are required to support the initial
Intranet implementation [4].
• Summarizing Benefits
Total up the benefits for each Intranet category under the three benefit headings: direct cost savings, labour
savings and productivity increases. Before making the calculations, it is necessary to determine the
proportion of the target population that is affected by each of the Intranet categories. For example, the whole
population may be affected by the use of the Intranet for information publishing, but only 30% for document
management and 50% for workflow. If these distinctions are not made, then it is likely to over-estimate the
benefits [4].
•
Comparing Costs and Benefits
Obviously it will be interesting to see whether the benefits do indeed exceed the costs. To do this in a way,
which reflects the impact on the organization's profit and loss account; it should spread the capital costs over
6
the write-off period. It may also be decided to reduce the benefits in year one to take account of the time
taken to develop and launch the Intranet and to train users. [4]
• Return on Investment
Return on investment is a way of expressing as a percentage the return that has been made relative to the
amount that has been invested:
ROI = Net return x 100
investment
The investment is the sum of the up-front capital and expense costs. The return is calculated as the annual
benefits less the ongoing capital and expense costs. [4,5]
5 Tripoli University case
Tripoli University is the largest in Libya and hence has a very large population. To feel benefits that can be
gained by implementing an intranet and to simplify calculations, only a subset of the university population
will be considered and that is members of academic staff of section “A”. This is to prove that even with this
percentage of the university population, return on investment of implementing an intranet is worthwhile.
Most of data used in the calculations are assumed data because it was not possible to get updated figures.
Assumptions
1. Targeted population for this analysis 1078
2. Number within targeted population that need PCs 1078
3. Number within targeted population need to be networked 1078
4. Average annual salary and benefit for targeted population 12000
5. Average working hours in a day 8
6. Average working days in a year 240
7. Depreciation rate for equipment & software 30%
8. Depreciation rate for network 10%
9. Write-off period 3 years for PCs
10. All costs and benefits in these calculations are in Libyan dinars
5.1 Costs
Following tables show the costs considered for the university case.
Table (1) Tripoli University section “A”
Start-Up capital and applications costs
Item Cost
New PCs 1078000
Networking 1500000
Server hardware/software 250000
Information publishing 1500
E-mail server 1000
E-mail client 16170
Document management 3000
Training 3000
Workflow 4000
Databases 15000
Total 2871670
7
Table (2) Tripoli University section “A”
Start-Up expense costs
Item Cost
Design consultancy 30000
Training 53900
Total 83900
Table (3) Tripoli University section “A”
On-going capital costs
Item Cost
Server Upgrades (25% of capital) 62500
Applications Upgrades (25% of capital) 10917.5
Total 73417.5
Table (4) Tripoli University section “A”
On-going Expense costs
Item Cost
Editorial and design personnel 36000
Technical support personnel 24000
Internet access 53900
Consultancy (25% of start-up) 7500
Training (20% of start-up) 10780
Total 132180
5.2 Benefits
Following tables show the benefits expected from implementing the university intranet
Assumptions
1. Percentage of full year's benefit expected in year 1 20%
2. Percentage of full year's benefit expected in year 2 40%
3. Percentage of full year's benefit expected in year 3 60%
4. Percentage of full year's benefit expected in year 4 80%
5. Percentage of full year's benefit expected in year 5 100%
6. Percentage of target population that benefit from intranet 100%
•
Information publishing
1. Direct cost savings
Table (5) direct cost savings gained from using
Information publishing application
Description value
Formal printed publication
Number of pages of printed material received per person per year 200
Cost in dirham per pages including delivery 100
Proportion of these pages that could be delivered on line 50%
Direct cost savings = 200 x (100/1000) x 1 x 0.5 x 1078 = 10780 dinars/year
Internal photocopied/laser printed publications
Number of pages received per person per day 5
Cost of derhams per page including delivery 100
Proportion of these pages that could be delivered on line 50%
Direct cost savings= 5 x (100/1000) x 1 x .5 x 1078 x 240 = 64680 dinars /year
Total direct cost savings = 10780 + 64680 =75460 dinars/year
8
2. Labour savings
Table (6) labour cost savings gained from using
Information publishing application
3. Productivity increase
Table (7) Productivity increase gained from using
Information publishing application
Description value
Percentage increase in personal productivity for each of the following:
a- Availability of more accurate and up-to-date information 1%
b- Availability of information not previously available 0.50%
Productivity savings = 1.5/101.5 x 1 x 1078 x12000 = 191172 dinars/year
Total information publishing savings = 75460 + 269500 + 191172 = 536132 dinars/year
• Intranet email
1. Direct cost. Savings
Table (8) Direct cost. Savings gained from using
Intranet email application
Description value
a- Phone calls
Phone calls per person per day to others 5
Cost in derhams per call 160
Proportion of these calls that could be replaced by e-mail 50%
Savings = 5 x 160/1000 x 1 x 0.5 x 1078 x 240 = 103488 dinars/year
b- Faxes
Faxes sent per person per day to others 1
Cost in derhams per fax 500
Proportion of these calls that could be replaced by e-mail 50%
Savings = 1 x 500/1000 x 1 x 0.5 x 1078 x 240 = 64680 dinars/year
c- Letters
Letters sent per person per day to others 2
Cost in derhams per letter (paper , envelop, postage) 250
Proportion of these calls that could be replaced by e-mail 50%
Savings =2 x 250/1000 x 1 x 0.5 x 1078 x 240 =64680 dinars/year
d- Memos
Memos sent per person per day to others 1
Cost in derhams per memo (paper and delivery) 100
Proportion of these calls that could be replaced by e-mail 50%
Savings =1 x 150/1000 x 1 x 0.5 x 1078 x 240 =19404 dinars/year
Total direct cost savings= 103488+64680+64680+19404= 252252 dinars/year
Description value
Minutes saved per person per day for each of the following:
a- Faster access to information 3
b- More rapid and easy exchange of information 5
c- Less duplication of effort 2
Labor cost savings= 10/(60 x 8) x 1 x 1078 x 12000 = 269500 dinars/year
9
2. Labour savings
Table (9) Labour.Savings gained from using
Intranet email application
Description value
Minutes saved per person per day for each of the following:
Less time trying to get through on the phone 3
Less time spent preparing and checking items to be sent out 4
Less interruptions 2
Savings= 9/(60 x 8) x 1 x 1078 x 12000 = 242550 dinars/year
3. Productivity increase
Table (10) Productivity increase gained from using
Intranet email application
Description value
Percentage increase in personal productivity for each of the following:
Faster access to information 0.50%
Productivity savings =0.5/100.5 x 1 x 1078 x 12000 = 64357 dinars/year
Total e-mail savings = 252252 + 242550 + 64357 = 559159 dinars/year
• Document management
Direct cost. savings
Table (11) Direct cost. Savings gained from using
Document management application
Description value
Internal photocopied/laser printed publications
Number of pages received per person per day for editing/reviewing/approval 5
Cost in derhams per page including delivery 100
Proportion of these pages that could be delivered on line 50%
Direct cost saving s= 5 x (100/1000) x 1 x 0.5 x 1078 x 240 = 64680 dinars/year
2. Labour savings
Table (12) Labour Savings gained from using
Document management application
Description value
Minutes saved per person per day for each of the following:
Less sending out documents for review / editing / approval3
Less time spent locating / obtaining documents for editing /reviewing / approval 2
Less duplication of effort (data content shred between documents)2
Savings = 7/(60 x 8) x 1 x 1078 x 12000 = 188648 dinars/year
10
3. Productivity increase
Table (13) Productivity increase gained from using
Document management application
Description value
Percentage increase in personal productivity for each of the following:
Faster access to accurate and up-to-date documents 0.50%
Productivity savings =0.5/100.5 x 1 x 1078 x 12000 = 64357 dinars/year
Total document management savings = 64680 + 188648 + 64357 = 317685 dinars/year
•
Workflow
Direct cost. Savings
Table (14) Direct cost. Savings gained from using
Workflow application
Description value
Number of forms completed per person per year 30
Cost in derhams per form (print, paper and delivery) 100
Proportion of these forms that could be completed and submitted on line 50%
Direct cost savings= 30 x (100/1000) x 1x .5 x 1078 = 1617 dinars/year
2. Labour savings
Table (15) Labour Savings gained from using
Workflow application
Description value
Minutes saved per person per day for each of the following:
Less time spent per person per form in obtaining up-to-date copies 2
Proportion of these forms that could be completed and submitted on line 50%
Savings= 2/(60 x 8) x 1 x.5 x 1078 x 12000 = 26950 dinars/year
3. Productivity increase
Table (16) productivity increase gained from using
Workflow application
Description value
Percentage increase in personal productivity for each of the following:
Faster and more reliable administration processes 0.5%
Productivity savings =0.5/100.5 x 1 x 1078 x 12000 = 64358 dinars/year
Total workflow savings = 1617 + 26950 + 64358 = 92925 dinars/year
11
•
Databases
Labour savings
Table (17) Labour Savings gained from using
Databases application
Description value
Minutes saved per person per day for each of the following:
Less time required to learn applications 2
Less time required to use applications 3
Savings= 5/(60 x 8) x 1 x 1078 x12000 = 134749 dinars/year
2 Productivity increase
Table (18) Productivity increase gained from using
Databases application
Description value
Percentage increase in personal productivity for each of the following:
The availability of information not previously available 0.50%
Productivity savings =0.5/100.5 x 1 x 1078 x 12000 = 64357 dinars/year
Total databases savings= 134749 + 64357 = 199106 dinars/year
6. Summary of costs
Table (19) Summary of costs
Item Cost
Start-Up capital and applications costs 2871670
Start-Up expense costs 83900
On-going capital costs 73418
On-going Expense costs 118680
Total 3147668
7. Summary of Benefits
Table (20) Summary of Benefits
Item Savings
Direct Cost Labour Productivity Total
Information publishing 75460 269500 191172 536132
E-mail 252252 242550 64357
Document management 64680 188648 64357
Workflow 1617 26950 64358
Databases 0 134749 64357
Totals 394009 862397 448601 1705007
12
8. Profit and Loss per year
Table (21) Profit and loss per year
Benefits
Year 1 Year 2 Year3 Year4 Year 5
Information publishing
E-mail
Document management
Workflow
Databases
Totals 341001 682003 1023004 1364006 1705007
Depreciations of capital costs
Year 1 Year 2 Year3 Year4 Year 5
New PCs (30%) 323400 323400 323400 0 0
Networking (10%) 150000 150000 150000 150000 150000
Server Hardware /Software
(30%) 75000 93750 112500 131250 150000
Applications (30%) 13101 16376 19652 22927 26202
Totals 561501 583526 605552 304177 326202
Expense costs
Year 1 Year 2 Year3 Year4 Year 5
Editorial/design personnel 36000 0 0 0 0
Technical personnel 24000 24000 24000 24000 24000
Internet access 53900 53900 53900 53900 53900
Design consultancy 30000 7500 7500 7500 7500
Training 53900 10780 10780 10780 10780
Totals 197800 96180 96180 96180 96180
Profit or loss
-418300 2567 321272 963649 1282625
9. Return on investment
Table (22) total investment
Capital cost 2871670
Expense costs 83900
Total investment 2955570
Table (23) Net return
Year 1 Year 2 Year3 Year4 Year 5
Benefits 341001 682003 1023004 1364006 1705007
On-going capital costs 0 -18354 -18354 -18354 -18354.
On-going expense costs -113900 -132180 -132180 -132180 -132180
Net return 227101 531469 872470 1213472 1554473
Table (24) ROI % per year
Year 1 Year 2 Year3 Year4 Year 5
ROI % 7.8 18 29.5 41 52.6
Accumulated ROI % 7.8 25.8 55.3 96.3 148.9
13
Fig. 1 return on investment for Tripoli university case
From figure (1) it is clear that the payback period is about 4 years and 1 month.
10. Conclusions
This paper looked at the various costs and benefits related to implementing intranet technology in any
organization and gave detailed analysis to these costs and benefits as well as return on investment for Tripoli
University as a case study.
Following are some concluding remarks resulted from this paper:
1. Using technology requires investment and this investment in many cases could be high. But the main
thing is what are the benefits gained.
2. It was clear that even utilizing just part of the services intranet can provide is enough to justify the cost
paid for it.
3. The important issue is that using intranet technology will save cost, time and improve productivity,
providing it is used in the proper manner.
4. This technology can be implemented in phases, which allows top management to schedule their budgets
over a time span that suits their particular situation.
5. The paper showed that for Tripoli University the ROI is acceptable if they decide to use this technology.
11. Recommendations
1. Many of our organization in all disciplines should adopt this technology since it is proved that it saves cost,
time and improve productivity.
2. Budgets should be allocated to start to implement this technology for the near future since time is slipping
away very fast.
3. For Tripoli University, its management should speed up the process of utilizing this technology with no
further delay.
Return on Invesntment
0
20
40
60
80
100
120
140
160
12345
year
Accumulated ROI %
14
References
1. Tyson Greer,: Understanding Intranets the decision guide to intranet technology, architecture and
design, security, business purposes and payoffs. Microsoft press, (1998)
2. Amer Daeri,: An investigation on the best alternatives to construct a core computer network for section
‘A’ of Tripoli university., MSc Thesis, Tripoli university, (2003)
3. Gordon Benett,: Introducing Intranets, A decision maker's guide to launching an intranet. QUE, (1996)
4. Clive Shepherd,: Assessing Intranet cost-benefits. Fastrack Consulting Ltd, (1998)
5. George McGrath and Anthony Schneider,: Measuring Intranet Return on Investment. The Complete
Intranet Resource, (2000)
6. Marjolein Bot, Johan Burgemeester and hans Roes,: The cost of publishing electronic journal, a general
model and case study., D-Lib Magazine, November (1998)